Rethinking the Role of Multilateral Institutions in an Ever-Changing Aid Architecture

Abstract

The international aid architecture is the set of rules and institutions underpinning the framework through which aid flows to developing countries. Multilateral institutions have long been a central pillar of this aid architecture. However, the proliferation of multilaterals has contributed to an increasingly fragmented system containing numerous agencies with overlapping mandates. New forms of multilateralism, such as vertical funds and earmarked trust funds, are increasing in prominence, while core funding to the traditional multilateral institutions makes up a declining share of total development assistance. At the same time, new modalities of assistance are emerging with the growth of privately funded non-governmental organizations (NGOs) and South-South development cooperation that largely bypass multilaterals. Development knowledge is also shifting from a phase in which technical expertise was invested in a relatively small number of institutions to a phase in which information can readily be transmitted across the globe, enabling new actors to innovate and disseminate their experiences. The knowledge advantage held by multilaterals has shrunk as more emphasis is placed on the practical ‘how to’ of development. This is a topic on which developing country governments, with actual implementation experience in this area, can have strengths relative to multilaterals that have invested in understanding the ‘what to do’ of development.